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2023 (1) TMI 739 - AT - Service TaxWrongful availment of CENVAT Credit - credit availed prior taking the registration - also credit availed on improper document i.e. on such invoices which were not in the name of registered address - violation of Rule 9 of Cenvat Credit Rules, 2004 and Rule 4(8) of Service Tax Rules, 1994 - extended period of limitation - penalty - HELD THAT - There is no denial to the fact that the appellant started providing taxable service prior getting its registration. The service in question were admittedly taxable service which were provided against the invoices. However, few invoices were issued at the address at which the appellant was /is existing. There is no denial of the department that Plot No. SP 2/93 Neemrana, Alwar, Jaipur from where most of the invoices had been issued subsequently became the registered premises of service provider vide registration dated 18.4.2017 Few invoices have been issued at the address which till that date has not been registered, i.e. at 1052, Sector 40, Gurgaon, Haryana but the appellants had taken these premises on license basis for some time and an agreement was duly executed for the purpose - the premises to be mentioned in invoice should be such from where the services have been provided instead of these being the registered premises. Though no Cenvat is allowed if document lacks necessary particulars. But the proviso to Rule 9(2) says that even if there is no precise document but otherwise the requisite details given in the said proviso as noted above are available on record, the Cenvat Credit may be allowed. In the present case, it is rather apparent fact that service provider /appellant had during the period of providing service in question applied for registration and finally got itself registered with the service tax Commissionerate. This fact is sufficient to hold that the invoices of pre-registration phase shall also be considered for availment of Cenvat credit by the appellant - Commissioner (Appeals) has wrongly stuck to Rule 9(2) of Cenvat Credit Rules, 2004, the proviso thereof has wrongly been ignored by Commissioner (Appeals). Resultantly, the invoices issued from unregistered address and the invoice of pre-registration time have wrongly been held to be invalid documents while ordering denial of Cenvat credit to the appellant. Ineligible import service - HELD THAT - The Commissioner (Appeals) has held that Cenvat credit of service tax paid by the appellant has otherwise been claimed on the ineligible import service. These findings are beyond the scope of impugned show cause notice. There is no allegation raised in the show cause notice about the services to be not eligible import service. The order under challenge is accordingly held to be beyond the scope of show cause notice. Hon ble Supreme Court in the case of COMMISSIONER OF C. EX., BANGALORE VERSUS BRINDAVAN BEVERAGES (P) LTD. 2007 (6) TMI 4 - SUPREME COURT has held that the show cause notice is foundation on which the department must build up its case. Hence the show cause notice should contain all the relevant details and departmental authorities have to be stick to the allegation in the show cause notice. Extended period of limitation - levy of penalty - HELD THAT - The show cause notice in this case is dated 12.12.2019. The Cenvat Credit availment has been denied for the period June, 2016 to June, 2017. Thus, it is clear that show cause notice is issued while invoking the extended period of limitation. From the above observed admitted facts, there does not appear any intention on the part of the appellant to evade service tax. Rather apparently and admittedly, the service tax stand already paid by the appellant. It is not the case of the department that service tax paid is a short payment. The extended period could have been invoked pursuant to proviso to section 73 of CGST Act and thus only in a situation where there has been apparent mis- representation, suppression of facts or collusion on part of the appellant that too with intention to evade the tax liability. Since the same is not the fact of the present case, the extended period has wrongly been invoked - Even the penalty on the appellant has wrongly been levied. Appeal allowed.
Issues Involved:
1. Validity of Cenvat Credit availed on invoices from unregistered premises. 2. Requirement of service provider registration for availing Cenvat Credit. 3. Allegation of ineligible import service. 4. Invocation of extended period of limitation and penalty imposition. Issue-wise Detailed Analysis: 1. Validity of Cenvat Credit availed on invoices from unregistered premises: The appellant availed Cenvat Credit amounting to Rs. 7,49,359/- on invoices issued from an unregistered address, which the department contested as improper under Rule 9 of the Cenvat Credit Rules, 2004. The Tribunal noted that Rule 9(1) permits Cenvat Credit based on invoices issued by a manufacturer or service provider, without mandating registration at the time of issuance. The Tribunal emphasized that the invoices contained all necessary particulars, including the address where services were provided, even if not registered. It concluded that the invoices are valid documents for availing Cenvat Credit, as per Rule 9 of the Cenvat Credit Rules, 2004. 2. Requirement of service provider registration for availing Cenvat Credit: The department argued that Cenvat Credit cannot be availed without the service provider being registered. The Tribunal referred to Rule 4 of the Service Tax Rules, 1994, which requires registration within 30 days of the service tax becoming applicable. However, it allows services to be provided before registration. The Tribunal found that the appellant had applied for registration during the service period and subsequently obtained it. It held that invoices issued before registration are valid for Cenvat Credit, supporting this with case law from the Karnataka High Court in M/s. mPortal India Wireless Solution Private Ltd vs Commissioner of Service Tax, which states that registration is not compulsory for claiming Cenvat Credit benefits. 3. Allegation of ineligible import service: The Commissioner (Appeals) had held that the Cenvat Credit was claimed on ineligible import services, which was beyond the scope of the show cause notice. The Tribunal noted that the show cause notice did not allege that the services were ineligible import services. Citing the Supreme Court's decision in Commissioner of Central Excise Bangalore vs Brindavan Beverages (P) Ltd., the Tribunal emphasized that the show cause notice should contain all relevant details and the department must build its case on it. Therefore, the Tribunal held that the findings on ineligible import services were beyond the scope of the show cause notice and invalid. 4. Invocation of extended period of limitation and penalty imposition: The show cause notice was issued on 12.12.2019 for the period June 2016 to June 2017, invoking the extended period of limitation. The Tribunal observed that there was no intention on the appellant's part to evade service tax, as the tax had already been paid. The extended period under Section 73 of the CGST Act can only be invoked in cases of misrepresentation, suppression of facts, or collusion with intent to evade tax, which was not applicable here. Therefore, the Tribunal held that the extended period was wrongly invoked, and the penalty was unjustified, supporting this with the Supreme Court's decision in Anand Nishikawa Co. Ltd. Conclusion: The Tribunal set aside the order under challenge, allowing the appeal. It concluded that the appellant was entitled to Cenvat Credit on the invoices issued from unregistered premises and during the pre-registration period, and that the extended period of limitation and penalties were wrongly applied.
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